spiked to $111.29 per barrel on Thursday, with trading at $107.57, inverting the global benchmark structure as the market repriced accessible supply amid a prolonged disruption at the Strait of Hormuz.
WTI rarely trades at a premium to Brent. Brent crude reflects seaborne crude and typically leads during global supply shocks, while WTI crude is usually discounted. The current inversion points to a breakdown in normal pricing signals tied to physical flows.
Part of the move is technical: WTI’s front-month contract reflects May delivery, while Brent has already rolled to June, skewing the headline spread. But the deeper driver is extreme prompt pressure—WTI backwardation has surged to record levels—signaling immediate demand for secure, deliverable barrels. With rising uncertainty around global shipping routes, WTI has effectively gained a “security premium,” narrowing and even reversing its usual discount to Brent.
Oil prices surged more than 10% after President Donald Trump said the U.S. would “hit” Iran “extremely hard” within weeks while offering no clear plan to reopen the Strait. Tanker traffic through Hormuz has collapsed, with shipments effectively stalled and cargoes unable to clear the region.
The Strait normally handles roughly 20% of global oil flows. That volume is now constrained. Meanwhile, European officials are mulling the formation of a coalition to restore oil flows through the Strait.
Brent is still reflecting substantial geopolitical risk. But Brent-linked barrels depend on waterborne movement. When flows are restricted, pricing loses immediacy.
WTI is pricing something else. U.S. crude is accessible. It can move. It can be loaded, exported, and delivered without transiting the Strait. That shifts demand toward barrels that are physically available.
Other accessible grades are moving in the same direction. Murban crude rose nearly 10% on the session, tracking the bid for barrels outside the disruption zone.
When seaborne flows are constrained, inland benchmarks can temporarily lead. The spread between Brent and WTI reflects that shift.
President Trump blamed the high prices on Iran “launching deranged terror attacks against commercial oil tankers and neighboring countries that have nothing to do with the conflict.”
